As the cotton season (October 2015 to September 2016) comes to an end and cotton prices have shot up to nearly Rs. 50,000 a candy, textile industry associations from different parts of the country met the Union Textile Minister Smriti Irani in New Delhi on Thursday.
The associations sought announcement of cotton fibre security policy by the Union Government. This is one of their long-pending demands. Cotton is the main raw material for the textile industry and cotton prices, which were Rs. 33,000 a candy, increased to Rs. 55,000 a candy in July this year. The spinning mills incur Rs. 20 to Rs. 25 a kg loss and this has been the situation for the last three months. Many mills have hence cut down production. Downstream industries, including powerlooms, handlooms, and apparel, are also hit because of the increase in cotton prices.
The textile industry is facing crisis for the last eight years now and volatility in cotton prices is one of the reasons for this, the associations pointed out. Spinning mills have not option but to buy cotton at high costs as banks extend only three-month credit limit facility.
The associations appealed to the Textile Minister to direct the Cotton Corporation of India to procure 70 lakh to 80 lakh bales of cotton during the peak season, when the prices remain low. The corporation should then sell the cotton to the textile mills directly between May and September. The mills also urged the Government to ensure that the country has 25 per cent stock-to-use ratio. It is now 12 per cent to 15 per cent as against the world average of 91 per cent, which includes China.
